Holiday Forecast: Tepid Growth, Mega Sales
The recession may have officially ended, but forecasters at Deloitte are predicting a holiday season that is more ho-hum than ho-ho for retailers.
While it's still better than last year, Deloitte's retail group expects total holiday sales to climb just 2% to $852 billion this holiday period, excluding motor vehicles and gasoline. (The holiday period is defined as November through January.) Last year, sales edged up just 1% over 2008 figures.
Deloitte attributed its subdued forecast to the continuing softness in both housing and employment, which is making consumers reluctant to spend. Adding that any good news -- like falling energy prices or a jump in the stock market -- might cheer them into spending more, "given the unsteady pace of economic recovery, retailers should expect only a small uptick in holiday sales this year," it says in its report.
Experts believe that will translate into another heavy promotional season. "We're going to see holiday shopping begin earlier, and the consumer is going to be much more considered in terms of what they're buying and how much they're buying," Doug Stephens, president of Retail Prophet Consulting, tells Marketing Daily. "Their confidence is just not very high."
He expects electronics sales -- especially smartphones and iPads -- to do well, "but in general, I don't think it's going to be a great year."
Online is likely to be the major exception, as it was last year. Deloitte is predicting a 15% gain in e-commerce, and that it will continue to shape in-store shopping, with both social networks and mobile apps influencing how people buy their gifts.
As a result, he expects to see heavy promotional efforts as stores try to woo every last customer. "And watch for massive national brand activity on GroupOn in the weeks leading up to the holidays," he adds.